A bank can foreclose on a home in succession. The death of the landlord does not dissolve the mortgage agreement, so the deceased person's estate must make mortgage payments. Unlike the Affidavit of Inheritance, an Attorney-prepared Order of Title is a judicial proceeding that is more reliable than an Affidavit. However, Texas law does not allow Muniment when there are unsecured debts (such as credit card bills or unpaid medical bills).
Mortgages on your mother's home and rental property are secured debts, which do not block the use of the Muniment process. With your property in foreclosure, using a proper Title Award process can give you the opportunity to renegotiate your loan or stop foreclosure by refinancing your loan. Use our form to send us your question and our lawyers will post the answers on our website. In order to meet the requirements of a valid (and verified) application under Section 131A of the Texas Probate Code (and Section 81 or 82 of the Texas Probate Code, as applicable), the creditor's attorney will necessarily need to conduct a rigorous investigation of the facts and circumstances involved.
Typically, the personal representative of the estate must use the assets of the estate to keep the mortgage current, so that the property can be maintained until it is sold or transferred to the new owner. Short selling and deeds instead of foreclosure also have to be approved by the investor who owns your loan, and that can require some negotiations and a difficult application process. A dependent (as opposed to independent) administration is a type of will that requires judicial supervision. Whatever the cause, the personal representative who has been appointed by the probate court to administer the decedent's estate has a fiduciary duty to manage the assets wisely.
That means you are required to do everything you can to stop a foreclosure using the other assets of the estate, whether it involves liquidating assets to pay the past due mortgage balance or selling the home. In some cases where family members know that the home is “submerged” (fair market value is lower than the main mortgage balance), the family may even decide to intentionally let the home go into foreclosure, assuming it's not worth it. However, probate is a complex process, and a competent lawyer must be hired to achieve the desired objectives. The processes up to, including and after the appointment of a temporary administrator are detailed in Sections 131A (appointment of temporary administrators), 133 (powers of temporary administrators), 134 (accounting) and 135 (closing) of the Texas Probate Code.
An independent administration is a type of will in which the administrator (sometimes called executor if there is a will) has broad authority to act on his or her own without much oversight by the court. While some lenders may be willing to work with the decedent's immediate family to resolve the foreclosure, most lenders will only work with the court-appointed personal representative. In short, yes, foreclosure can be foreclosed if the landlord has died and ownership of the property is being determined by a probate court. A foreclosure sale under a trust deed is void during the administration of a dependent unless the lender complies with the process outlined in the Probate Code.
If the lender is not willing to stop foreclosure, ask your attorney to obtain a court order for stop foreclosure and give you reasonable time to liquidate assets. .